How one startup wants to solve an 'insane' problem for a $400 billion industry

Back in 2001, Andy Wilson and Sheng Yang were working at a
Washington, D.C., print shop frequented by law firms, banks, and
real-estate firms.

They specialized in helping lawyers with what legal types call
"discovery," or the process of sifting through emails and
documents to find things relevant to the case at hand.

At that point, discovery was done by literally printing out every
potentially relevant email for attorneys to sift through.

That print shop got tapped to print the emails for the landmark
2001 Microsoft antitrust case.

Wilson recalls printing out piles and piles of Bill Gates' and
Steve Ballmer's emails, boxing them up, putting them on trucks,
and delivering them to the courthouse, where as many as 300
attorneys would be searching them for anything relevant to the
case.

"This is ridiculous," Wilson recalls saying to Yang not long
after. "Let's start a company."

The result was Logikcull,
which is trying to make electronic discovery (eDiscovery) cheaper
and available to smaller firms.

It seems to be a smart move. Law is a $400 billion industry in
the US alone, according to
some estimates.

The way you pay for eDiscovery software from legacy vendors like
HP Autonomy and Symantec involves a lot of nickel-and-diming,
Wilson said.

First you pay for the eDiscovery software itself. Then you pay to
have your data processed. Then you pay to keep your files in the
system until the case is resolved — which can take years.

Even once those documents are in the eDiscovery software, it
usually goes into "really s----y databases," Wilson says. You can
search by keyword, or by column heading, but you can't do a lot
of deep searching. And usually you could access the database only
from a Windows computer running an outdated version of Internet
Explorer, if you could get to it from the browser at all.

Logikcull pricing starts at a flat $2,000 monthly fee for four
cases, with 50 gigabytes of uploading per month included and
$30/GB after that.

That may seem expensive, but remember that it's still a lot less
than that $18,000-per-gigabyte average from other vendors. Wilson
says it can save law firms as much as 80% on their litigation
costs. And the emails themselves get tagged and categorized
automatically by things like date or topic so attorneys can find
what they're looking for much faster.

The idea, Wilson says, is that lower eDiscovery costs bring down
the total cost of litigation, meaning smaller firms can afford to
take bigger cases. It evens the scales a little bit, Wilson says.

A 2nd crack at the problem

Bill Gates during the landmark United States v.
Microsoft case.Wikimedia
Commons

Logikcull got its start as Logik.com, which launched in 2004.
Being based in Washington, D.C., Logik.com found itself tapped
for cases ranging from the subprime-mortgage crisis to
white-collar crime.

Charging $2,500 a gigabyte, Logik.com took in $4.5 million in
revenue and $3 million in profit every year between 2004 and 2009
— with only seven employees.

When the Great Recession hit, Logik.com found that a lot of its
business dried up. And so Wilson and team reinvested most of that
profit in a second version of the product, without the need for
venture financing: Logikcull, released in 2013.

Even without outside investment, Logikcull was able to hire the
experts it needed to develop a browser-based,
computer-plus-smartphone software solution and was able to build
its own data center to support it.

Two months ago, in March, Logikcull took in its first round of
venture-capital financing, a $4.5 million seed round led by Storm
Ventures. Logikcull was making money, Wilson says, but wanted the
investment so it could afford to take more risks with the
business. Today Logikcull has just over 20 employees.